Ontario will freeze wages for 1.2 million public servants in an austerity budget that could trigger an election as early as May.

Finance Minister Dwight Duncan said teachers, doctors, nurses, hospital workers and others on the public payroll will just have to make do as the province struggles with a deficit next year of $15.2 billion.

Ontario will freeze wages for 1.2 million public servants in an austerity budget that could trigger an election as early as May.

But with the Progressive Conservatives threatening to defeat the spending plan and the New Democrats on the fence, Ontario could be plunged into another election just six months after October’s vote.

Against that backdrop of brinksmanship, Finance Minister Dwight Duncan said teachers, doctors, nurses, hospital workers and others on the public payroll will just have to make do as the province struggles with a deficit next year of $15.2 billion.

“If Ontario does not take strong action, the deficit will grow, which would mean unsustainable levels of debt,” Duncan said as he tabled his $126.4 billion plan, the largest ever.

While the Tories urged a mandated wage freeze, the Liberals have resisted, concerned a 2005 Supreme Court of Canada decision on B.C. health workers would render it unconstitutional.

In the 2010 budget, the Liberals tried to skirt that by calling for a voluntary freeze, which met with little success.

But now, Duncan says, the government will legislate a wage freeze in 4,000 different labour agreements if it cannot be negotiated.

“Bargaining in good faith is not only the right choice to make, the Supreme Court of Canada requires it,” the finance minister said, emphasizing the goal is “not about demonizing teachers or nurses.”

“Where agreements cannot be reached that are consistent with the government’s plan to balance the budget . . . we are prepared to propose necessary administrative and legislative measures to protect the public from service disruptions — and also to protect jobs for teachers, education staff, and health-care workers,” he said.

Still, it upset union leaders like Fred Hahn, president of the 200,000-member CUPE Ontario, who predicted “protests at Queen’s Park” and political pressure on Liberal MPPs.

With an overall provincial debt of $260.4 billion that costs about $10 billion in annual interest payments, Duncan insisted he has little choice but to act.

That’s why Tuesday’s budget, entitled, “Strong Action for Ontario,” included a 50-page booklet detailing all of the cuts in various programs to assure credit-rating agencies that belt-tightening is being taken seriously.

A credit downgrade would raise the cost of borrowing.

In all, the government hopes to cut spending growth and contain costs by $17.7 billion over the next three years.

Despite the dire fiscal circumstances, taxes are not going up, though a planned reduction in corporate income tax rates from 11.5 per cent to 10 per cent in July 2013 will be delayed until the books are balanced in 2017-18.

The budget uses as its blueprint economist Don Drummond’s Feb. 15 report on cutting the size and scope of government.

Drummond had advised the Liberals to keep spending increases to 0.8 per cent and health to 2.5 per cent over the next five years. The Liberals’ budget will restrict overall hikes to 0.9 per cent and health to 2.1 per cent.

With two-thirds of Ontarians not receiving a taxpayer-subsidized pension, the Liberals, who have rewarded public servants with lucrative settlements for most of the past eight years, hope a vast swath of voters will be sympathetic to their curbs.

But it remains to be seen whether the Liberals can garner the necessary opposition support for the budget to avoid an election.

The earliest the government could fall in the Legislature would likely be April 26, meaning an election on May 24 or May 31.

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